A key focus for the Government’s Future Telecoms Infrastructure Review was around barrier busting – alleviating the cost to network deployment. As part of this thinking, DCMS has published a toolkit outlining good practice and recommendations for the street works process of deploying fiber across the UK. The framework is intended to guide local authorities and operators and contractors towards working more collaboratively and ultimately enabling a more efficient roll out.(more…)

The Government has announced the conclusion of its Future Telecoms Infrastructure Review. The Review which was announced in the Industrial Strategy sets out the targets and overall policy framework for the sector for the next 15 years.

The headlines are a confirmation of the Government’s targets for full fibre coverage to reach 15 million premises by 2025 and full coverage by 2033, with 5G coverage by 2027. The targets and accompanying policy shifts – in particular the change in competition models – mark a significant evolution in the Government’s approach.

Commenting on the publication of the report the BSG’s Chair, Richard Hooper CBE, commented “The BSG welcomes the Government’s publication of its Future Telecoms Infrastructure Review and is pleased to be playing a useful role in barrier-busting in implementing fixed and mobile networks, and in PSTN switch-off which is the important precursor to fibre switchover.”

Fixed

The Review marks a significant shift towards greater emphasis on infrastructure competition, justified by the Government’s analysis of ultrafast deployment in Australia, France, Germany, New Zealand, Spain and Sweden.

Outlined below is Government’s estimation of how coverage can be delivered in particular areas. It should be noted that the c33-83% of coverage is particularly variable dependent on the number of competing networks – in this instance too much competition/overbuild in the first 33% will have a negative impact in the second area.

Coverage

At least 33%

Up to another 50% (variable)

c10% (variable)

c10% (variable)

Economic model

At least 3 competing gigabit capable networks

Potential for 2 competing gigabit capable networks

Single operator vis ‘Competition for the market’ mechanism

Subsidy model along lines of BDUK

In total, the Review outlines the costs of this is in the region of £30bn. These figures haven’t changed much since the BSG’s work in 2008 given that the majority is due to civils work (ie digging the hole). Government also believe that access to capital is not the issue – but ensuring efficient investment is. Therefore, realizing this ambition will require getting 5 things right:

Making the cost of deploying fibre networks as low as possible by addressing barriers to deployment, which both increase costs and cause delays;

An ‘outside in’ approach to deployment that means gigabit-capable connectivity across all areas of the UK is achieved at the same time, and no areas are systematically left behind; and

A switchover process to increase demand for full fibre services.

A more detailed list of actions that the Government intends to take is outlined at the bottom of this page. However, the Government has followed through on the recommendation of the National Infrastructure Commission to employ an ‘outside-in’ approach. This is focused the final c10% that will require subsidy and over which Government has the greatest control. It has already identified £200m within the existing BDUK Superfast Programme that can further the delivery of full fibre deployment (in practice this is accelerating what is already underway). However, it is also clear that this area will require somewhere between £3-5bn in public subsidy. The Review is quiet on where this funding comes from but given the Chancellor’s support it will be worth watching the Autumn Budget for more information.

5G

The Government wants the UK to finalise the rollout of the 4G network taking it from the current 87% reach to 95% by 2022. For 5G, it is targeting that the majority of the population have a 5G signal by 2027. The Review recognises that the roll out for 5G will not follow the same path as previous mobile generations and expect to see phases of deployment – with a low capacity layer providing wide area coverage (700 MHz band), high capacity for high demand areas (3.4 – 3.6 GHz) and mmWave bands providing for very high capacity hot spots.

The Review examines three potential future market models to most ably promote 5G investment and innovation: the current model, a single national wholesale network (a shared network pooling spectrum and operating on a wholesale service to MNOs) and the Government’s preferred market expansion model (expanding on competition between multiple networks with a ‘neutral host’ infrastructure and private networks.

Government also highlights the measures is has taken to make it both easier and cheaper to deploy mobile infrastructure and what future steps its believes might be necessary. Many of the potential obstacles were highlighted in a report prepared by Analysys Mason and published last week for the BSG on ‘Lowering the Barriers to 5G Deployment’.

The Government, in line with the National Infrastructure Commission’s 5G Report recommendation, recognizes that more flexible spectrum licensing might be needed to allow for the innovative services and new investment models of 5G. Spectrum sharing models could facilitate a greater number of services and address the specific connectivity challenges of the high frequency bands and potential for a resulting low geographic spectrum efficiency. The Government intends to ask Ofcom to report on spectrum utilization in the mobile bands so as to identify where potential for spectrum sharing exists.

Convergence

5G is often referred to as a fibre network with a wireless interface. There is some truth to this but importantly there is also increasing similarities between how fixed and wireless networks look from a network viewpoint. Government has signaled a short term point – unrestricted access to Openreach’s infrastructure (currently just for domestic broadband) to allow MNOs to take advantage of it for wireless backhaul – and a longer term issue which might signal a greater regulatory change. This is the potential for unified market reviews for ‘access’ networks rather than currently looking at fixed and wireless markets in isolation. Niche but one to keep an eye on.

Key recommendations and actions from the FTIR:

New legislation that will guarantee full fibre connections to new build developments;

Providing Operators with a ‘right to entry’ to flats, business parks, office blocks and other tenanted properties to allow those who rent to receive fast, reliable connectivity, from the right supplier at the best price;

Reforms to the regulatory environment for full fibre broadband that will drive investment and competition and is tailored to different local market conditions;

Public investment in full fibre for rural areas to begin simultaneously with commercial investment in urban locations;

An industry led switchover (from copper to full fibre) coordinated with Ofcom;

A new nationwide framework which will reduce the costs, time and disruption caused by street-works by standardising the approach across the country;

Increased access to spectrum for innovative 5G services

Infrastructure (including pipes and sewers) owned by other utilities such as power, gas and water, should be easy to access, and available for both fixed and mobile use;

Ofcom to reform regulation, allowing unrestricted access to Openreach ducts and poles for both residential and business use, including essential mobile infrastructure;

Alongside the FTIR, Government has also published a Digital Infrastructure Toolkit which will allow mobile networks to make far greater use of Government buildings to boost coverage across the UK.

The Broadband Stakeholder Group has published a report on ‘Lowering barriers to 5G deployment‘. It outlines the challenges and solutions to deploying new mobile infrastructure necessary to meet the UK Government’s ambition to be a 5G leader.

The report – ‘Lowering barriers to 5G deployment’ – is the outcome of a study by Analysys Mason researching barriers to 5G deployment from both industry and local authority perspectives in the UK, identifying key challenges faced during the deployment process. The report aims to assist the UK Government in delivering its ambition to be a 5G leader by identifying and proposing solutions to current and potential barriers to network deployment.

Legal barriers, deployment issues and challenges with stakeholder engagement all have the potential to delay the rollout of 5G. Taken together and against a general background of uncertainty regarding the business case for denser 5G networks, these could also ultimately limit the deployment of 5G infrastructure. Currently they act as a significant brake on investment due to additional costs and/or delays, meaning that network providers will have difficulty committing to roll out, without greater certainty of success.

Alongside the uncertain investment case for 5G and in particular for very dense small cell networks, many challenges stem from the lack of certainty over the benefits that 5G will deliver for the UK. Wider articulation of this value will help reduce uncertainty for industry and increase awareness of national priorities for mobile infrastructure within local authorities who have the greatest operational impact on network deployments.

The report also identifies thirteen specific barriers, reflecting practical challenges in planning and deploying mobile infrastructure for 5G. We propose a total of 21 recommendations for central government, local government and industry stakeholders – with short term wins including standardised access to public sector sites and leveraging the Government’s Local Full Fibre Networks Programme to assist in the deployment of 5G networks.

Richard Hooper, Chairman of the Broadband Stakeholder Group said “The Government is rightly ambitious in wanting to ensure that the UK can benefit from being a global leader in the use of 5G. The difficulty lies in how to efficiently deploy the infrastructure that 5G requires and we believe that this report provides a roadmap for how we can do so – removing unnecessary barriers and helping to deliver more investment and ultimately better coverage and capacity for users.”

Matt Yardley, Partner with Analysys Mason and project director for the study, commented “The next 12-18 months are vitally important for the mobile industry to prepare for 5G deployment. Easing barriers to deploying that result in lengthy delays in site planning, or increase costs of deployment to unrealistic levels, should be a key priority for Government, local authorities and the industry”.

This report on lowering barriers 5G deployment builds on an earlier report published by us in May 2017 exploring barriers to the deployment of fixed telecoms infrastructure. Access to fibre networks will underpin the deployment of 5G, and the new report finds that the recommendations for lowering barriers to fixed network deployment (from the May 2017 report) should also be acted on as quickly as possible to support the UK in becoming a world leader in 5G.

The UK telecoms industry is awaiting Government’s Future Telecoms Infrastructure Review which we expect to see over the next few weeks. Whilst it is still unclear what the precise measures will contain the recently published National Needs Assessment from the National Infrastructure Commission offer a few clues.

Their headline recommendation was to call for a National Broadband Plan. So what might such a plan look like and what would it mean for Government policy in telecoms?

Targets

The NIC called for nationwide full fibre broadband by 2033. This helpfully aligns with what the Chancellor, Philip Hammond, called for in a recent speech, although he had also indicated that he wished for the UK to have hit around 15 million premises by 2025.

It goes without saying that these targets are extremely stretching and equate to around 2 million premises connected each year. This will not be easy but it’s welcome that Government is now setting out a path to deliver on these targets – particularly as we have been without meaningful connectivity targets for 6 months, having largely delivered on superfast targets.

Alignment

There are key areas of alignment worth keeping an eye on. Firstly, there may be greater recognition for wireless infrastructure as we move to a 5G world and start to see Government address mobile with the same urgency and recognition in legislation and policy initiatives as it does fibre. This might not result in immediate change but would be an important step nonetheless.

The second is on current Government initiatives. The targets for full fibre have occurred following the introduction of several Government interventions. Some of these align quite well with the full fibre push – as the name suggests, the Local Full Fibre Networks programme is one. Others, some of which are central Government’s responsibility and some are from the devolved bodies seem to be out of joint.

The NIC interestingly included a line on Government intervention, saying that it should “focus initially on the areas least likely to receive full fibre broadband commercially, and which are also most likely to experience unreliable broadband through long distances of copper cables”. This appears to advocate an ‘outside-in’ approach and appears to contravene the approach outlined under the Universal Service Obligation which is aimed at 10Mbit/s services. How these changes could be delivered is hard to say but expect this issue to continue to be raised if it isn’t addressed in some form.

Maximising Private Sector Investment

It’s unlikely that the economics, in terms of positive business case, for full fibre will differ from superfast/NGA networks. In fact there’s the potential for it to be worse as rival companies invest in digging trenches to lay fibre to the same premise. Again the NIC offers a potential solution; let competition flourish in areas where private investment is viable, deploy an ‘outside in’ approach with Government subsidy and meet in the middle. What this middle ground will constitute is harder to make-out but the report does make reference to a ‘targeted solution’. Certainly this area has the potential for Government to deploy an innovative solution which maximises private sector investment, potentially in return for either regulatory or tax holidays.

Barrier Busting

A central theme of Government’s work has rightly focused on removing regulatory, planning, procedural and pretty much anything that detracts from a positive investment environment. Expect to see more detail and action in the FTIR particularly around access to public buildings and trying to drive greater take-up of standardised wayleave agreements.

Whilst these might be the headlines there’ll also be interest in Ofcom’s role, most notably on 5G coverage obligations but also in helping incentivising more fibre deployment, whether the potential impact of Brexit is incorporated, and the role of technologies outside of 5G and full fibre – from satellite to low power wide area networks.

The National Infrastructure Commissiontoday called on Government to ensure it is on the right path to get full fibre broadband out to all homes and businesses by 2033 with a short term target of by Spring 2019 seeing the production of a nationwide full fibre connectivity plan. The National Infrastructure Assessment – the first ever of its kind – examines the UK’s economic infrastructure needs up to 2050.

Nearly two years after the European Commission proposed new rules to update current EU telecoms rules that had been in force since 2009, the European Parliament and Council have finally reached a political agreement on the new European Electronic Communications Code. (more…)

The third Lloyds UK Consumer Digital Index released today looks into financial and digital capability in the UK for 2018. With a focus on digital skills, financial resilience, and inclusivity the report reveals improvements for those gaining digital skills, with 470,000 more than last year with new skills. Initiatives such as those set up last year by the Department for Culture, Media and Sport’s Digital Skills Partnership have been credited with collaborating to promote best practice through the creation of a network of over 70 cross-sector bodies.

The results of spectrum auctions being run by Ofcom were today announced. This principal stage of the auction will see the release of airwaves in two frequency bands – 2.3 GHz, will help advance today’s mobile phone use in 4G services and 3.4 GHz, a band that will enable the running of future 5G services. (more…)

For residents to be able to qualify for a voucher, a local community group – comprising small businesses as well as residents – must be formed. Vouchers may be pooled in this group although the value of business vouchers would have to exceed the residential total value. This pooling approach can relieve some of the costs where the cost of installation is greater than the voucher issued.

The market trial of the scheme which was running across four areas of the UK saw around 1000 vouchers dispensed to small businesses. The extension of the scheme is expected to go live the end of March and run until March 2021 (providing that funding remains).

Whilst the voucher scheme has been generally very well received, it should be noted that in order to deliver maximum benefits, measures should be in place to ensure that residents and SME’s alike are made aware of its existence. It would appear that Government has learned the lessons of the previous vouchers and sought to structure the scheme to incentivise additional investment in full fibre; done right, these vouchers should make a good contribution towards the Government’s goal of having full fibre available to at least 10 million homes and businesses by 2022.